US House Committee Takes Important Measures to Halt CBDC Issuance
Chairperson Patrick McHenry has recently confirmed the House Financial Services Committee is taking steps to halt the development and issuance of CBDCs. In a recent report issued by the Committee, the chairperson has talked about hosting two legislative sessions to discuss two bills.
The bills in question deals with the subject matter of digitized dollar project that was prepared during 20th September. Teams of lawmakers and legislators are set to attend these sessions to discuss and issue new provisions regarding CBDC issuance and other details.
The first bill in question is Digital Dollar Pilot Prevention Act or H.R. 3712. This bill deals with the matter of Federal Reserve jurisdiction over CBDCs.
Once finalized this bill will provide legislative clarity on how the Fed may or may not issue CBDCs without approval from Congress. This bill was first introduced by House representative Alex Mooney in May.
To date, Fed has retained that it has not ruled on the matter of when it plans to issue a CBDC. In this manner, the Central bank is taking the legislative route for the issuance of CBDCs.
Congress Discusses Important Bills to Restrict CBDC Development
The second bill in question is called the Federal Reserve Act. This bill intends to bar the Fed from offering products or services directly to the retail consumers that are linked with CBDCs.
Furthermore, the bill also deals with barring the Fed from conducting monetary policies through CBDCs. The bill calls for revocation of CBDC issuance from the Central bank. At the same time, the bill also overturns any other type of digital currency from the Fed using a different name or label.
At the same time, if approved this bill will prevent Fed from issuing a CBDC or any other similar product indirectly to individual using financial institutions as intermediaries. The Federal Reserve of San Francisco is noted to seek assistance of technical experts during last few months.
It indicates that the Central Bank has been considering issuance of a CBDC. The matter of digital dollar has become one of the important political debates in the country with presidential candidates issuing statements for or against the digital dollar. The naysayers have raised questions about unwarranted government surveillance.
Bank of International Settlement Claims that CBDCs Can Ensure Data Privacy
Bank of International Settlement (BIS) has recently claimed that CBDCs can enable secure and private transactions. The institution opines that digitized legal tender transactions will be settled on the ledger under control of the Central Bank.
BIS is working on a new project dubbed as Sela that aims to protect CBDCs from hack attacks and making them available for distribution to the masses.
On this account, BIS officials claim that the transactions of the CBDC in project Sela are going to remain private at the digital ledger of Central bank by obfuscating the personal details of the users. This project has mandated that it intends to use a novel intermediary for handling customer support without letting the issuer to hold funds directly as a security measure.
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